Property fraud is a significant and growing risk. Often fraudsters can perpetrate such fraud by using fake or fraudulent documents.

So, as regulated professionals, estate agents need to be able to spot such documents and ensure they do not fall foul of document fraud.

What is it?

Document fraud is the act of creating, altering, or using false or genuine documents with the intent to deceive or pass specific controls.

Criminals may use fraudulent documents to enter the UK illegally, obtain employment, banking, or legal services, housing, access to sites and hire vehicles for unlawful purposes.

There are two broad categories of fraudulent documents, false and genuine documents used for fraud.

False documents include counterfeit, forgeries and pseudo or fantasy documents.

A counterfeit document is one that has been made from scratch to resemble an officially issued document but is an unauthorised reproduction. Even for experts, high-quality counterfeits can take time and be difficult to identify.

A forged document is a genuine document altered for a criminal purpose. Altering photographs and personal details are typical examples, but pages, visas and stamps may also be forged.

Pseudo or fantasy documents have no legal basis and are usually not based on any legitimate document but may have the physical appearance of a passport or identity card. However, they are not officially recognised and are not acceptable proof of either nationality or identity.

Genuine documents used for fraud may include genuine documents obtained through theft, robbery, or corruption. Such documents may also include those that an impostor misuses. This can include situations where the possessor of the document may look like the rightful owner.

What are the risks?

Agents that miss the opportunity to identify red flags around identification documents may inadvertently enable criminal and fraudulent activity.

If an agent has missed such a document through carelessness, they may be subject to civil penalties or criminal prosecution, including fines, a prison term and reputational damage.

As a result, document verification is critical for agents and their firms.

Estate agents must seek to confirm the authenticity of relevant documentation they rely on as client due diligence.

Manual review is vulnerable to human error. It is also costly and time-consuming.

What’s more, as fraudsters and the documents they use become more sophisticated, agents must ensure they keep up to date with the latest developments.

How can technology help?

Automating document verification can reduce the pressure on staff, improve the customer onboarding experience and help prevent fraud.

Some tools use the latest technology, such as artificial intelligence and biometric data, to check documents for signs of tampering, forgery and counterfeiting.

Robust platforms will run a document through a database to determine whether the document has been reported to the police as lost or stolen.

Document verification as part of an agent’s identity verification process will help ensure that a person is who they claim to be and that the agent hasn’t been provided with a false document.

Overall, it helps prevent criminals from successfully using a fake or false document to commit fraud, helping protect agents and their legitimate clients.

Harriet Holmes, AML services manager at Thirdfort, a risk management platform combining Know Your Client, Anti-Money Laundering and Source of Funds verification.